When was the last time you checked your credit score? What about your credit report? You’re definitely not alone if you think credit is confusing and scary and boring. But it’s important for your big-picture money and life goals, which is why we’re sharing these credit building tips to help — even if you have no credit at all!
Buying a car? A house? Turning your side hustle into a business? Credit gets you those loans. Maybe that’s years down the road for you—but credit has immediate benefits too. A good score secures you that apartment lease and gets you the credit cards with the best rewards. It even saves you thousands of dollars with lower interest rates 
I’ve spent over 15 years working in credit and banking, where I saw firsthand these effects. This work—and building credit as an immigrant—made me care deeply about making credit growth accessible. Last year I co-founded Kikoff, a 0% interest credit builder, to help other people on their money journeys.
So let’s break down all things credit—what makes up your score, common misconceptions, and how to grow your credit.
What’s a credit report? A credit score?
Your credit score is a number—between 300 and 850—that shows lenders how trustworthy you are to repay their loans. Your credit report, on the other hand, lists all your financial activity. Try to make a habit of checking it frequently for mistakes or fraud. An FTC study found that 1 in 5 people have at least one error on their credit reports.
There are three major bureaus that provide credit scores: Equifax, Experian, and TransUnion. When calculating your credit score, they look at five categories: payment history (35%), credit use (30%), average account age (15%), credit mix (10%), and new credit (10%). When talking about how to grow credit, we’ll be focusing on the three largest categories.
Credit Building Tip #1: Payment History
This is a record of all your past credit card and loan payments—it specifically looks at whether you’ve paid them on time. The longer your payment history, the better. This is the single most important factor in your credit score.
To build payment history, make sure you’re making all your payments for loans and credit cards. And remember that they should be on time!
Making payments on time is actually more important than the amount of your payment or the type of loan you have.
Credit Building Tip #2: Credit Utilization
Credit utilization is the ratio of how much credit you’ve used to how much you can use—your credit limit. The lower this ratio, the better. Experts recommend keeping your spending under 10% of your credit limit. Let’s say you have a $500 line of credit—that would be under $50.
If that seems unrealistic, try to keep your credit utilization under 30% – so if you have a $10,000 credit limit on your credit, keep your balance under $3000!
To keep your utilization score in check, try to never borrow more than you can pay back. Keep your credit card balance as low as possible, and consider asking your credit card company for a limit increase. Every credit card has a limit—the better your score, the higher it usually is.
Credit Building Tip #3: Average account age
Your average account age is the average number of months your account’s been open. The higher this number, the better. Think twice before cancelling a credit card just because you’re not using it. Closing an account will bring your average account age down and likely impact your credit score, so keep your accounts open — even if you’re not using them!
Start building your credit today
Kikoff, wink wink, helps with these three key areas of your credit score. We’re designed to maximize your credit growth—Kikoff offers extremely low utilization rates, and the opportunity to build payment history for as long as you want. We show up on credit reports exactly like a credit card would.
For a lot of us, simply getting access to credit can be difficult. If you don’t have credit history, lenders don’t want to give you loans, and if you can’t borrow money you can’t build credit history.
That’s why when you apply for Kikoff, you get approved instantly—no credit history necessary.
Building credit is a journey. Missed a payment? Didn’t realize credit utilization was a thing? We’re human. We’re learning. Credit bureaus may not know the story behind your payment history, but remember that we are more than our credit scores. It’s the process that matters.
About the Author:
Cynthia is co-founder and CEO of Kikoff, a mission-driven startup that helps people build credit for free. A serial entrepreneur, she had built three FinTech unicorns before Kikoff. She also invests in start-up companies in both the U.S. and emerging markets.
